A Particular Bank Has Two Loan Modification Programs for Distressed

question 82

Multiple Choice

A particular bank has two loan modification programs for distressed borrowers: Home Affordable Modification Program (HAMP) modifications, where the federal government pays the bank $1,000 for each successful modification, and non-HAMP modifications, where the bank does not receive a bonus from the federal government. To qualify for a HAMP modification, borrowers must meet a set of financial suitability criteria. Define the null and alternative hypotheses to test whether borrowers who receive HAMP modifications default less than borrowers who receive non-HAMP modifications. Let p₁ and p₂ represent the proportion of borrowers who received HAMP and non-HAMP modifications that did not re-default, respectively.

• A) H₀: p₁ - p₂ ≤ 0, H_A: p₁ - p₂ > 0
• B) H₀: p₁ - p₂ ≥ 0, H_A: p₁ - p₂ < 0
• C) H₀: p₁ - p₂ = 0, H_A: p₁ - p₂ ≠ 0
• D) H₀: p₁ - p₂ > 0, H_A: p₁ - p₂ ≤ 0

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Definitions:

Group Tasks

A set of responsibilities or activities assigned to a group to be completed collaboratively.

Basic Group Goals

Fundamental objectives pursued by a group, such as task completion, member satisfaction, or effective decision-making, that guide their activities and interactions.

Extended Period

A lengthy duration of time that is longer than usual or expected, often referring to timelines for projects or significant tasks.

Social Group

A collection of individuals who interact with each other, share similar characteristics, and collectively have a sense of unity.